Tag: middle distillates

Best in Energy – 16 March 2023

Climate target of 1.5°C called in doubt ($FT)

Credit Suisse gets lifeline from central bank

Banks as privately-owned state agents ($FT)

Exxon ramps up new crude distillation unit

Iran/Saudi deal to end arming Yemen ($WSJ)

If you are interested in banking supervision and financial failures, I can strongly recommend “Integrity, Fairness and Resolve”, a short monograph published by the Federal Reserve Bank of Kansas City about the savings and loan crisis of the 1980s. “Belly Up: The Collapse of the Penn Square Bank” also comes with my highest recommendation for a combination of insight and dark humour.

OIL PRICES fell sharply on March 15 in response to growing fears about a banking crisis and its impact on the economy. Brent futures were pushed bellow the bottom of the recent trading range:

U.S. DISTILLATE fuel oil inventories amounted to 120 million barrels on March 10. Inventories were -13 million barrels (-10% or -0.81 standard deviations) below the prior ten-year average. But the deficit has narrowed from -21 million barrels (-16% or -1.62 standard deviations) at the start of 2023 and -31 million barrels (-22% or -2.05 standard deviations) on October 7, 2022:

Best in Energy – 8 March 2023

Russia/India switch trade settlement out of dollars

India’s heightened risk of evening power shortages

Nord Stream sabotage linked to Ukraine ($NYT)

Ukraine denies involvement in pipeline sabotage

U.S. shale chiefs recognise end of revolution ($FT)

Tesla shifts focus to cutting manufacturing costs

Nuclear generation deployment is shifting to Asia  

China’s military researchers study Ukraine conflict

Europe boosts diesel from Middle East and Asia

Tech sanctions to spur industrial espionage ($FT)

U.S./China struggle to stabilise relationship ($WSJ)

U.S. CENTRAL BANK chief Jerome Powell toughened his rhetoric on core inflation during congressional testimony, sending forecasts for interest rates surging higher on March 7. Rate traders expected interest rates to end 2023 at around 5.55% up from a forecast of 5.38% on March 6:

SINGAPORE distillate inventories remain at their lowest level for the time of year since 2008. Stocks are -4 million barrels (-36% or -1.91 standard deviations) below the prior ten-year seasonal average. The deficit has only narrowed slightly from six months ago when it was -4 million barrels (-34% or -2.21 standard deviations):

Best in Energy – 2 March 2023

Global CO2 emissions hit record high in 2022

India refinery processing hits seasonal record

Latin America accelerates solar deployment

U.S. gas turbines reach record operating rate

Argentina experiences mass blackout

United States explores more China sanctions

Passenger aviation demand stays high ($FT)

U.S. rail freight weakened further in February

China prepares economic team overhaul ($FT)

U.S. MANUFACTURERS reported business activity declined in February for the fourth month running. The ISM composite activity index was 47.7 in February up marginally from 47.4 in January but both readings were in only the 16th percentile for all months since 1980. New orders fell for the sixth month in a row. The new orders sub-index (47.0) was in only the 14th percentile for all months since 1980:

U.S. DISTILLATE inventories were unchanged over the seven days ending on February 24. Stocks were -14 million barrels (-11% or -0.87 standard deviations) below the prior ten-year seasonal average but the deficit has narrowed from -31 million barrels (-22% or -2.5 standard deviations) on October 7:

Best in Energy – 10 February 2023

Russia plans to cut oil production by 0.5 million b/d in March

Indonesia’s coal-fired generation and “just energy transition”

U.S. gas production growth set to slow as futures prices slump

Germany’s storage firms to “refine” gas purchasing strategy

U.K. energy inefficient homes and heritage preservation ($FT)

U.S. heating oil prices ease from record high in early November

CFTC/ICE commitment of traders suspended for second week

NORTHWEST EUROPE is now roughly two-thirds of the way through the winter heating season. In an average year, two-thirds of all heating degree days at Frankfurt in Germany occur on or before February 10. Cumulative heating demand has been the lowest since the winter of 2015/16 and before that 2006/07. With the 2022/23 heating season now winding down, traders’ attention has already turned to the summer refill season and winter 2023/24:

U.S. INTEREST RATE traders anticipate a major reduction in inflationary pressure – with or without a significant slowdown in the business cycle – which has been reflected in a sharp reduction in forward interest rate forecasts. Market forecasts for interest rates at the end of 2024 fell by more than a full percentage point between the start of November and the start of February:

Best in Energy – 30 January 2023

India requests coal-fired generators stay in service

India plans to order maximum coal-fired generation

Jet fuel prices surge on post-pandemic consumption

Asia’s seaborne coal prices slip on plentiful supplies

Russia/Ukraine: which side does time favour? ($WSJ)

BP publishes revised energy outlook through 2050

EU gas price cap sparks plan to shift TTF to London

Israel/Iran drone attack ($WSJ)

EUROPE’s gas futures summer-winter calendar spread for July 2023 to January 2024 has slumped into an increasingly wide contango as traders anticipate a record carryover over inventories from winter 2022/23 which will leave the storage system short on space.  Lower gas prices in summer 2023 will encourage more consumption by power generators and major industrial users. Higher prices may still be needed to restrain consumption during the peak of next winter:

U.S. OIL DRILLING has started to slow in response to the fall in prices since the middle of 2022. The number of rigs drilling for oil was just 609 on January 27 down from a cyclical high of 627 on December 2: